Short bias on the daily charts – OCBC

USD/JPY continued to trade lower amid decline in UST yields. Pair was last at 145.59 levels, OCBC’s FX analysts Frances Cheung and Christopher Wong note.

Fed-BoJ policy divergence and de-dollarisation supports USD/JPY’s downside

“Bullish momentum on daily chart shows signs of fading while RSI fell further. Support next at 144.15/40 levels (21 DMA, 23.6% fibo). Resistance at 146.15 (50 DMA), 147.10 (38.2% fibo retracement of 2025 high to low). We kept our short USDJPY (entered at 148 (as per FX Weekly on Mon), targeting a move towards 141. SL at 151.”

“We reiterate that while timing of BoJ policy normalisation may be deferred, policy normalisation is not derailed. Fed-BoJ policy divergence and USD de-dollarisation theme should still support USD/JPY’s broader direction of movement to the downside.”